Cotton export is picking up following stable currency. In the last few months the rupee exchange rate has remained stable against the dollar.
China, which is sitting on buffer stocks of cotton, has started increasing import of cotton from India. While demand from Pakistan, Bangladesh, Indonesia and Vietnam has also increased.
So far this cotton year (October – September) over 6 million bales (1 bale = 170 kg) have already shipped out of the country and another 1 million bales are expected to be exported in the next one month.
Total cotton exports expected to reach 10 million bales this cotton year. The Cotton Advisory Board (CAB) had earlier projected 9 million bales of exports in cotton year 13-14. Previous year exports was 10.14 million bales. In 11-12 India exported 12.96 million bales.
Although, China in the recent past has decided to increase cotton yarn imports instead of cotton, they have resumed their buying to a certain extent from India.
Rupee has now started to play a huge role in deciding if importers should import cotton from India, also many importers a few months ago were revisiting their contracts which they signed with Indian exporters and were canceling them as the rupee was weak coupled with higher cotton prices.
Rupee in the last one month has stabilised around Rs 62 level, while cotton prices in the last one month have also more or less remained stable though at elevated level of Rs 43,000 per candy for the benchmark variety of Shankar 6.
“Although China in the last couple of months has started to decrease their cotton imports but due to stability in the rupee they have revived their buying from India. Pakistan and Bangladesh have also started to import cotton from India in a big way. Rupee has started to play a big role in exports,” said M B Lal, a Mumbai based cotton exporter.
Buying from our neighbours have picked up in a big way and also their need for cotton is very high which has caused exports of cotton to pick up.
China is expected to buy small quantities of cotton in the coming months as well and this will also help push exports, as China is the biggest importer of the Indian cotton.“Due to heavy demand coming in from our neighbours, this year cotton export are likely to pick up,” said SP Oswal, chairman of Vardhaman Textiles.